About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

55 comments:

  1. 1
    Kary L. Krismer says:

    I was hoping Tim would do the foreclosure thread today. Anyway, the news is out that foreclosure notices are down from March, but still above last April (obviously). I ran the number of trustee’s deeds for King County, and they were only 207 in April, down from 230 in January and 233 in February. I’m guessing that’s all the result of the recent moratoriums.

  2. 2
    The Tim says:

    RE: Kary L. Krismer @ 1 – Yeah, sorry. I had pre-planned with the Tableau folks to do the neighborhood MOS update today, so I will be posting foreclosures tomorrow.

  3. 3
    patient says:

    RE: Kary L. Krismer @ 1

    “Foreclosures: ‘April was a shocker'”
    http://money.cnn.com/2009/05/13/real_estate/April_foreclosure_stats/index.htm?postversion=2009051310

    Oh-oh…

    Seems like foreclosures are just building in force and the govs attempts to slow them down is like trying to stop a cracking dam to burst with bandaid.

  4. 4
    Kary L. Krismer says:

    The local news on foreclosures:

    http://www.seattlepi.com/local/406143_foreclosure13.html

  5. 5
    Nick says:

    Can anyone help me understand the buzz still about the tax credit? If I understand correctly, it phases out at an AGI of $75k and is gone by $95k. It also is only valid for first-time homebuyers.

    How many first-time buyers in this area are making below $95k but can still afford an entry-level SFH priced at $250k+?

    Nick

  6. 6

    RE: Nick @ 5
    Nick,
    When they say ” first time buyers” they mean you haven’t owned a principal residence in the last three years, and the AGI is doubled if you’re married.
    Seems to me that if you’re making 95 K a year you probably can afford the payments on a 250 thousand dollar house. With 20% down and at current interest rates, the monthly payments on a fixed 30 yr loan would be about 1300 a month including taxes and insurance.
    The problem is that there aren’t a lot of decent 250,000 dollar homes in the Seattle area.

  7. 7
    Chris says:

    Looks like the SEC is provide Angelo Mozilo with some legal work to keep him busy.

    http://online.wsj.com/article/SB124224647957816523.html#mod=testMod

    I’m a subscriber to the WSJ so I don’t know if non-subscribers will be able to access this article.

  8. 8
    seattlerenter says:

    What is the difference betweeen NFS and NTS on foreclsure.com? I know Notice of Trustee Sale, but what is NFS and why the 2 different ones?

  9. 9
    JJL says:

    The up to date foreclosure stats are always available on my blog:

    http://snohomishcountymarketstatistics.blogspot.com/

    On the right hand side under Graphs and Stats see King County Foreclosure Rates 2009. I have two graphs. One shows bargain and sale deeds which I recently started tracking. This requires me to look at every individual deed filed at King County to extract those that are Bargain and Sale Deeds.

  10. 10
    One Eyed Man says:

    RE: JJL @ 9

    JJL, If you are looking at each deed, I assume you are including only those Bargain and Sale Deeds involving a trustee (on a deed of trust) as the grantor. There are other uses for Bargain and Sale deeds besides as a trustee’s sale deed.

  11. 11
    Nick says:

    RE: Ira Sacharoff @ 6
    So, a single person needs to make $75k or less to qualify, and we’ve established that $250k should really be more like $300k or $350k in Seattle (by today’s market prices).

    So realistically when the the media hypes the spring bump as being fueled by people “taking advantage of the credit”, they’re mostly talking about the group making $75k a year, using a 3% down FHA loan, on a $300k-$350k house.

    I mean if people had enough cash sitting around for 20% down ($60k) plus fees, why would there be all this emphasis on bridge lons? Are they going to be that strapped for the additional $8k?

    I guess my point is that the tax-break should have little impact on “Seattle” real estate, yet it’s constantly trumpeted as a way to get people off the fence.

    Nick

  12. 12

    RE: Nick @ 11

    I agree with you Nick. The 8000 dollar credit will have a much bigger impact in places where house prices are a lot lower.

  13. 13
    JJL says:

    RE: One Eyed Man @ 10

    Yes – I’m counting the ones that were transfered by a Trustee. The others are only 1 or 2 here and there anyway.

  14. 14
    Kary L. Krismer says:

    RE: JJL @ 13 – Huh? I thought you were using the bargain and sale deeds to find bank owned sales.

  15. 15
    JJL says:

    Kary, when the Bargain and Sale deed is recorded, it is recorded “as trustee” for the Seller (usually a bank) so you can tell which ones are sold through auctions and such. They are recorded under regular “deeds”, not under Trustee Deeds. Did that help? I think that was your question.

  16. 16
    Mike says:

    I am in the market to buy a bigger house because I have 2 kids now. In my research using Redfin, my realtor via NWMLS listing; I find that to get anything decent you still have to fork out 500k. My search has been focused on 3+ bedrooms, 2+ bathrooms, 2000 sqft house in the 98125 and 98155 areas. I asked my agent to pull up REO properties for North Seattle and he said there wasn’t any fitting my criteria. It would seem that North Seattle is either pretty resilient in this market because houses are still quite overpriced, or my agent made a mistake in pulling up the REO listing or the banks are just not listing the property and holding on to them.

    In my opinion, I think it is important when doing the comps is to also compare houses that were auctioned off because of a foreclosure. However NWMLS does not compare data on foreclosed houses sold off at auctions. This piece of information is somewhat useful in determining the lower floor price that some one is willing to purchase a similar piece of property. How can you accurately appraise a property that has been sitting unsold for over 200 days?

  17. 17
    Trigger says:

    I think what Obama should do now is simply guarantee everybody that if they buy a shack whatever shack and for whatever price it is not going to loose value. If it looses value when selling Obama will just take the tab.

    The only issue is that a buyer and seller could agree onto some whacko price and then sell soon after and then split the govt revenue 50/50.

    But even this would get money flowing into the system and we could inflate a bigger bubble then ever before. This would be the biggest bubble in centuries and our kids would learn how it got deflated in the end and the consequences coming from this.

    In the short term this would get money into the system fast.

    Another idea is that the govt would cough up 20% of each sale of the shack. So if the shack costs 400K – Obama would pay 80K and the buyer 320K. This would also stem foreclosures and get money flowing into the system fast.

  18. 18
    Kary L. Krismer says:

    RE: Mike @ 16 – Foreclosures are not arm’s length transactions and aren’t used as comps for a number of reasons: Limited financing, limited or unavailable title insurance, limited ability to inspect, greater general risk, etc. Many/most appraisers don’t even consider short sales or bank owned unless those sales reach a certain threshold in the market.

    I find your other questions sort of odd though. You’re limiting yourself to a rather small area, and then questioning why that area is so expensive. Seemingly the reason is because that area is attractive to buyers, like yourself (e.g. buyers with 2 kids).

    Finally, I pulled some stats on 3-4 bedroom, 1.75+ bath homes in those two zip codes, using the past six months and the same period from 06-07. The median has only dropped from 410k to 399k, the mean from 477k to 440k, with only a nominal increase in average square footage (24 square feet).

  19. 19

    RE: Kary L. Krismer @ 18
    If I recall correctly from the appraisal classes I took was that houses sold on the courthouse steps are not looked at, but REOs and short sales are, but mostly discarded because they will likely be considered the outlier if they’re the only one in the mix. In some areas where REOs and short sales make up a majority of the sales they will have a large impact on the non foreclosure comps.

  20. 20
    Kary L. Krismer says:

    RE: Ira Sacharoff @ 19 – As I mentioned in another thread, I had a listing where there were three other virtually identical houses that sold recently, but they were REO and SS. Mine was $50,000 over the lowest price house, and appraised out. So I can only assume the appraiser excluded such sales.

  21. 21
    TheHulk says:

    From curiouscapitalist.blogs.time.com


    In fact, according to the Federal Reserve’s Survey of Consumer Finances, it was the middle class, broadly defined, that levered up. Between 1998 and 2007, those in the bottom 20% of the income distribution and those in the top 10% saw their leverage ratio (debt/assets) go down, while the rest of Americans levered up. The biggest increases were in the 20% to 40% quintile, with the 40% to 60% group coming in second. I think this means Madrick is closer to being right than Ferguson is, but what it really indicates is that Warren is on to something. Middle-class Americans got much deeper into debt over the past decade—for whatever reason—and that overindebtedness landed us in a financial crisis.

    Hmmm looks like a lot of middle America leveraged debt to the hilt either in the form of vanilla mortgages or HELOCs. Man, whatever happened to the idea of saving money first and then spending it?

  22. 22
    CJM says:

    I’m curious what the”educated” guesses are for the bottom. I think that most people who call themselves “experts” were calling the bottom this month or next. But I believe the “experts” rely on real estate for income so they made emotional guesses. Now that we are still seeing the freefall, as the forclosure crisis becomes noticable in the NW, and we are in the height of peak buying season, what are the educated guesses for the continued drop?

    Another 10%?
    20%

    over the next year, two, or three years?

    From what I have seen, I will admit there is some basis to the Seattle is special, I referring to in-city (ballard, Freemont, Wedgewood). I’m guessing the continued declines will happen outside seattle as a whole. I think Seattle might go -2 – 5% lower then flat for at least a year after that but it’s the Suburbs that are going to get blasted. Has anyone driven through Bothell lately?

    As a fence sitter, I’m looking away from Seattle and keeping an eye on the northend. I’m already seeing short sales in Mountlake terrace, Kenmore and Lynnwood area going for less than 2005 prices.

    New construction still isn’t budging in those area’s but I’ve learned that most of those builders found smart ways to mitigate their risk and rolled most of their homes into holding companies while taking the profit on their construction business. So they’ll sit and sit and then the banks will get them and they’ll sit longer. So I’ve given up on the good deals from desperate builders.

  23. 23
    TheHulk says:

    Bottom calling is a fool’s game since it depends on so many factors (desperate sellers, uninterested buyers, tough financing, foreclosure moratoriums, short sales etc.)

    Rather than indulge in bottom calling, here is what I am going to do. Keep looking on redfin in very specific areas (good schools, close enough commute) and specific houses (based on my specific requirements). Whenever a house comes up, that is close to my criteria, I mark it in my favorites. I go to the open house and check out the place physically. Then I go and hunt for historic data. How much did the place sell for before all this bubble mania (prices around 2000). I factor in a 3-4% increase per year to account for inflation. This is the “minimum” price even I would expect as a homeowner. If, since that time, the house has had major changes (that make sense to me, not to the owner) I add a subjective premium and determine what would be the “maximum” price I would pay for that house.

    Looking at recently sold prices for comparable homes, people are still paying prices in la la land anywhere between 50 – 150K over my maximum price. I am waiting and observing what happens going forward. I would certainly jump in when prices start nearing the theoretical maximum that I am wiling to pay.

  24. 24
    Sniglet says:

    I’m curious what the”educated” guesses are for the bottom.

    I am on record for predicting something in the neighbourhood of an 80% drop from peak average prices in the Puget Sound by the time we hit bottom. I don’t think we are anywhere close to a bottom yet.

    That said, I don’t believe we will see a bottom this year, or even in 2010. This process will take years, and there will be times where things seem to be recovering for 12 to 24 months (with big stock rallies, increases in real-estate sales, etc).

    As readers of this blog know, I’ve outlined much of my views in my podcast.

    http://surkanstance.blogspot.com/2009/01/deflation-101-podcast.html

  25. 25

    “what are the educated guesses for the continued drop?

    Another 10%?
    20%”

    Yeah, that’s about in line with my thinking. Some areas will get whacked harder than that, and some less.
    I don’ think we’ll see the bottom this year, or if we do it will be late in the year. I do think we’ll see the bottom in 2010, but flatness for a couple of years after that.
    So my opinion falls somewhere in the middle…Less extreme than Sniglet, but far more pessimistic than most RE pros.

  26. 26
    TheHulk says:

    The new york times economic section reported gets delinquent….

    http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html

    See my comment above about how middle class America purchased debt to the hilt. This is one of them, except he wasnt a poor / ignorant / uninformed person taking out this loan. The whole thing is pretty amazing. If supposibly sensible people like him did this, I wonder what chance a semi educated person would have.

  27. 27
    CJM says:

    RE: TheHulk @ 26

    Very interesting article…I don’t think the words educated or semi educated can describe the normal american’s who were persued by snakes. If I had had not been a recent college grad who spent more on my car than my rent, I would have succumbed to one of those snakes, as bad an investment a car is, mine saved my a$$ from this mess.

  28. 28
    TheHulk says:

    CJM do you mean your car loan saved you from getting a house loan?

    I would take issue with your statement of “certain areas in Seattle are special”.

    Certain areas may be holding up because:

    1. People moved “up” and plugged in equity from a previous sale. This insulates them from 15% declines, not 30% declines.
    2. Not too many houses changed hands in these areas in the bubble years (in which case those people dont give a hoot about the current mess, except that they have awesome refinance opportunities)
    3. People in these areas can afford to pay the current mortgage, because they earn well, but in reality they want to sell the house because they realize they are overpaid for an asset whose supposed value is not coming back for another decade.

    I suspect the areas that are “holding up” have many people in the 3rd category. These would be higher income earning lawyers, doctors, techie/business types who have 100K+ incomes to support their mortgages. Given a choice though (especially if they purchased in the last 5 years) they would get out in a flash.

  29. 29
    CJM says:

    RE: TheHulk @ 28
    My car loan didn’t really stop me from buying a home it did keep me from thinking about buying a home. My 20 something thought process was that I wanted a nice car and to live nice not be house broke. If i didn’t have a nice car, I would have chosen to become house broke. And that would have been in 2006.

    Those are good points that are not the first thing that somebody would think about when analyzing those areas but when you look on Redfin, people are still selling there homes for more than 2006/7 values. Yes they are HOT areas to live. People are lined up with there realtors waiting to buy a home in Greenlake or Ballard and most homes in those areas are on the Market for less than 2 months. True, people who live there rarely move for many reasons including my own belief that many have been inherited.

    People still have jobs and the majority of the economy is still chugging along and will continue to. Until a major earthquake or an actual meltdown of our economy, people will still want to be within 15 minutes of work. That makes 175,000 people who would desire to live in these areas. I can guarantee that there are enough of those people who earn enough or have enough equity to continue to purchase these homes. Not to mention the second wave of Californians moving to Seattle. That place is in the dumps, they are even selling off their prison’s!

  30. 30
    Eastside Westside Its All Good says:

    And now for some amusement by way of loony behavior.

    ‘One of these is not like the other’ or ‘The irrationality that confirms that the recovery is not upon us because people are not ready to face reality’

    Door Number One

    Door Number Two

    Door Number Three

  31. 31
    Eastside Westside Its All Good says:

    I edited them. They seem to be working for me now…

  32. 32
    TheHulk says:

    Are you telling me houses in Ballard / Greenlake are still selling at 2006 levels? I dont monitor those areas closely, since I am not interested in them but I would look at the following:

    1. Has a house that was purchased any time in 2006 sold for the same price today (the past 6 months) ? Or was it a house that *would* have sold for 700K in 2007 is now selling for 500K?
    3. If it was, AND the house was purchased for more than 500K, was the buyer a first time buyer?

    If the answer to both of the above is yes and the buyer is in late 20s/ early 30s I would be extremely surprised.

    There will always be knife catchers…

  33. 33
    Racket says:

    RE: Eastside Westside Its All Good @ 30

    Door #3 does have a “Bellevue” address. #1, is Newcastle (for people who don’t want a renton address , and #2 is renton.

    http://www5.kingcounty.gov/kcgisreports/property_report.aspx?PIN=6072650170

    I wonder if there is a grow room in the basement or something.

  34. 34
    Eastside Westside Its All Good says:

    Door #3 is Renton schools – it’s comparable to the others

  35. 35
    Magnolia44 says:

    The Hulk @ 28

    You really think there are that many people who make good money and enjoy where they live sit and worry and secretly want to sell their home?
    Wrong view my friend I think many people enjoy living here cause its a great neighborhood, beautiful walks, great people I think you are way off. We fall in the category you describe and I know we have not once said we should sell, we might lose more If we stick around.

    I guess you need to be in those shoes, making good money having thousands of dollars left over every month after a mortgage payment to know that paying an extra 500 or 1k in mortgage payments is not the end of the world if you love your house and happend to buy at a time of higher prices.

    Good luck and keep on with you justifications.

  36. 36
    Racket says:

    Maybe the “get out ” means get out from being upside down.,

  37. 37
    Kary L. Krismer says:

    RE: TheHulk @ 32 – The lowest priced houses selling in any area are not that likely to have sold previously in 2006. The lowest price houses will be the houses where the owner has the most equity, and bought it for the least amount a long time ago. While someone who bought a house with a good down payment could go lower, they’d be less likely to do so than someone who is just giving up profit by accepting a lower price.

  38. 38
    David Losh says:

    RE: Magnolia44 @ 35

    It’s great to be comfortable.

    Yes I think there is a shift in what people will live with and want to sell. You’re not in that category right now but let me try to convince you.

    The Real Estate market has been driven up in price by false pretenses. The stock market, or rather stock prices have been over valued for years. People with retirement plans, 401Ks, or IRAs were sold a bill of goods.

    It should all be clear now that GM was more interested in making loans than cars. Sears set up Discover Card to sell off that division then make a deal with I think HBSC, whoever that is. GE Capital or consumer credit makes more money than the wildly profitable hospital equipment division. The list goes on.

    Financing has given the false hope that our economy was basically sound. We in fact traded paper globally until there was no equity left. There are no new markets to buy our paper. That’s what it comes down to.

    Sure you can be comfortable, any one can, but there is a lot to do to get our economy back to profitable basics. A part of that is getting rid of the debt incurred by holding onto a depreciating asset. Housing prices in order to stabilize will have to come down quit a bit across the board.

    Banks are fighting that with threats. I think we can see that our financial markets are run by a bunch of petulant children who refuse to take responsibility for bad business decisions. Most people want the consumer, you, to be stuck with the bill. Most people want the stock holders to pay for the losses.

    In the end it will be up to you to sell for less to buy for less, or the bank will need to adjust principle balances. It’s never going back to business as usual.

    My question is why so many people are willing to give banks money when they have demonstrated they will only squander it? As credit declines the economy declines and the ability to pay will be in fewer and fewer hands. You’ll be paying for everybody in the end.

  39. 39
    TheHulk says:

    RE: Magnolia44 @ 35

    Boy oh boy magnolia, am I glad you are not my investment advisor. If someone overpaid by 50K on a house (not unusual in the past 2 years at all), do they even vaguely realize that paying it off at 5% interest rates means over the life of the loan they will pay 100K. Paying off an extra 1K every month would have me scared. Good neighbor hood, beautiful walks, great people, yada yada yada, that sounds like real estate spin to me. Everything in life, especially the things you purchased on debt have a certain price. You certainly sound confident since prices have *only* dropped 20%. Would you be so confident if you were 20% underwater?

    Personally if I was that much at periscope depth, I would do a short sale and get out while I still had my savings. I would move back into a plain simple apartment and attempt to minimize my costs. Paying one extra grand a month for an asset whose value is not coming back for a decade results in a simple monetary loss of 120K over 10 years, not taking into account investment/dividend returns. That could at least mean a couple of years of college education for a kid in future dollars if nothing else.

    And yes, I “get” your snarky advice about having thousands of dollars left over every month after a mortgage payment. In reality I do save thousands every month, the only thing is they go into my bank account for a nice hefty downpayment when prices return to earth.

    RE: Kary L. Krismer @ 37

    My point exactly Kary, if houses in that area are *still* selling at 2006 prices, that would actually imply that those areas really are special. Since those prices are so out of whack with incomes, a regression to mean is inevitable. The first to succumb are obviously the people who have more equity. As the sacrifice their “virtual” money, it will bring comps down and hence prices will come down.

  40. 40
    Scott Weitz says:

    Hulk and Kary-

    You’ve overlooked one category: I propose that the first homes to sell will be those foreclosed on in 2009, then those with equity. Those who bought in the last couple years will either 1) walk away; 2) sell at a loss; or 3) live in the home for the rest of their lives.

  41. 41
    Magnolia44 says:

    Hulk,

    Are you under the assumption prices will never ever be at 07 levels ever again? If i am here 30 yrs and when i sell or die if the house is worth more does it matter? Your theory tells me everyone should be bitter and counting how much more they paid than grandma down the street cause she got in at the bottom.

    People are different and worry about different things. If everyone sold because of fear or the thought they paid too much so tske losses now, where would we be?
    I think many of the 50% off people might be like guys i come across, no cable tv because imagine how much you could have if you saved that amount for 30yrs compounded, no meals out, splitting a bill with me to the penny on a night out, asking for gas money since they drove.

    No thanks man, i am here to enjoy life. One other thing headed our way is inflation.

  42. 42
    TheHulk says:

    RE: Scott Weitz @ 40

    You are partially right. Foreclosures will continue to happen as long as prices keep falling and we gradually work our way thru the ARM mountain. Those however will have a slightly different pricing mechanism than the rest and will probably not affect comps (unless every other house is a foreclosure).

    People who purchased any time in the 90s will be the next to leave and will be more amenable to cuts in equity. This would significantly affect comps and I would not be surprised to see anywhere between 5 and 10% cuts from current prices.

    As time goes by and people realize houses across the street are selling at 30% less, people will either walk away or sell at a loss. Not too many will have the courage to stay in the game, especially if they dont have a lot of skin in the game in the first place.

  43. 43
    Scott Weitz says:

    Hulk @ 42

    What’s the pricing mechanism difference?

    1) Propertys gets foreclosed on because John Doe lost his job
    2) Property doesn’t sell at the foreclosure sale because there is no equity (thus starting bid is too high)
    3) Property reverts back to the bank
    4) Bank puts on the market to get it off its books
    5) Bank lowers price until it sells.
    6) Comps go down. Market goes down.

    Oh wait. I forgot a potential Step 4…Obama administaration creates new program to use trillions in tax dollars to buy property from bank in another feable attempt to artifically prop up the markets.

  44. 44
    TheHulk says:

    RE: Scott Weitz @ 43

    The difference is, in a foreclosure the home could be damaged, the bank might want to get rid of the asset at any price, there will be trouble appraising the foreclosure etc. In other words the foreclosure price becomes an outlier.

    For a short sale on the other hand the bank would b1tch and m0an over every price drop and would argue with the seller on the way down. Hence the difference in pricing mechanism.

    RE: Magnolia44 @ 41
    Ha ha If some people were crowing as the bubble was peaking as to how much “equity” they had built up, I am sure at least some of those very same people are going to be bitter, when grandma moses purchases the house across the street for 30% less.

    Look at the big picture magnolia. Sure enough you may sell or die in your house after 30 years and that you dont give a hoot what happened 30 years ago (I certainly hope so for your sake). That does not take into account the lost opportunity of the money you put into a depreciating asset. For example, 10 years ago, if someone had asked your to put 1K every month into GM shares, how would you feel today? Effectively that is what you are doing today. It seems you have chosen to acknowledge this and you are fine with it. Most people though would re examine if they really need that house at that price and might decide to go down a different path.

    As to accusing me of penny pinching, nice try! I dont sweat the small things in life. I am lucky enough that I dont feel the need to get the latest tech toy or car out there to enjoy life. To borrow your own example your 1K extra mortgage payment in a single month would buy someone a breakfast latte for one whole year but hey that’s just me pointing out the obvious.

    I am a cautious person and I do take a hard look at big purchases. If a person is not concerned about the biggest loan in his life, I think there is something wrong with that person, but again thats just me talking.

  45. 45
    what goes up must come down says:

    It is funny the same person who kept saying people on this blog hoped for finacial ruin of the country so bloggers here could get a house cheap now holds out hope for inflation as their savior go figure.

  46. 46
    Kary L. Krismer says:

    By TheHulk @ 39:

    RE: Magnolia44 @ 35

    Boy oh boy magnolia, am I glad you are not my investment advisor. If someone overpaid by 50K on a house (not unusual in the past 2 years at all), do they even vaguely realize that paying it off at 5% interest rates means over the life of the loan they will pay 100K. Paying off an extra 1K every month would have me scared.

    I think your math is wrong here. $100k over 360 months is $278. Or if you want to amortize it, $50,000 at 5% over 30 years would be $268 a month.

  47. 47
    Kary L. Krismer says:

    By Kary L. Krismer @ 37:

    RE: TheHulk @ 32 – The lowest priced houses selling in any area are not that likely to have sold previously in 2006. The lowest price houses will be the houses where the owner has the most equity, and bought it for the least amount a long time ago. While someone who bought a house with a good down payment could go lower, they’d be less likely to do so than someone who is just giving up profit by accepting a lower price.

    I’m quoting myself to follow up on this. I’ve repeatedly noted that the NWMLS stats are more pessimistic than Case-Shiller as to how far we’ve fallen. One explanation I gave for this was the broader physical area covered by Case-Shiller. But thinking about the statement above, I think Case-Shiller throws the sale out if the prior sale was too many years ago (over 10 or 15 or something). But those are the properties that are the most likely to sell for the least. By excluding those, Case-Shiller would give more optimistic results.

  48. 48
    what goes up must come down says:

    Kary, I think you need to run the numbers again, it depends on the beginning value of the house, run 400k house for 30years at 5% versus a 450K house same interest and term you get a delta closer to 96K.

  49. 49
    what goes up must come down says:

    Kary my bad I thought it was the total value you were taking exception to but it was the 1K a month Sorry.

  50. 50
    Kary L. Krismer says:

    Yep, it’s about $96,500 over time for the extra $50k.

    Somewhat amazing that number is under 2x the amount paid. When I got my first mortgage the number would have been over 3x. (10.25%)

  51. 51
    jon says:

    RE: Kary L. Krismer @ 47 – The CSI is an index, not a price, so it is not susceptible to the distortion in the median caused by increased sales at the low end. The NWMLS figures are showing the median sale price, which only shows where in the market sales are concentrated. On the other hand, if current sales are weighted towards REO, and large numbers of them are houses that have not been maintained properly, then even CSI will be pulled down relative to what the market will be when it stabilizes.

  52. 52
    Kary L. Krismer says:

    RE: jon @ 51 – If the sale price is too low, C-S throws it out.

  53. 53
    Lake Hills Landlord says:

    Hulk@26

    I read this story yesterday. I’m not perfect by any means, but reading this guys story makes me feel much more successful in every aspect of my life. I couldn’t help but shake my head and think he is a complete and utter failure at life. He might be successful in building positive relationships with his children and second wife, but I suspect that, like his initial rosy analysis of his own economic situation, is probably all in his head as well.

  54. 54
    David Losh says:

    RE: Magnolia44 @ 41

    It’ gets clearer every day that the financial markets are in serious trouble. The articles these past couple of days are about Life Insurance copanies taking TARP money. Some bought banks to be eligible. Many are heavily invested in banks.

    Home pricing is only a drop in the bucket. It is the consumer who pays that mortgage so it is the most stable paper investment. The big money is in commercial paper,

    The bank stock goes up along with the Life Insurers stock and again the consumer buys those stocks. In my opinion there is no substance in the transaction. It’s simply a manipulation.

    How long will that go on before some one, or every one just stops buying in to it?

  55. 55
    Magnolia44 says:

    Want inflation, no its going to happen no doubt about it.

    David,

    Yes the whole thing is a shill and makes me ill. I try not to pay attention to one of my favorite past times, the market because it makes me sick. Everything is a mess, in the end we all may be screwed time will tell. Until then though I can’t sit and worry about it every day. Am I concerned about the economy and jobs, yes but I can’t control it so I need to do my best to not focus on it.

    We are all rats in a great big wheel, enjoy the race while we are here. We could have been born into another country and another way of life, we could have been a Madoff investor who lost everything… The list goes on and on.

    To sum it up “life is short”

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